Asked by Kaylee Craig on May 28, 2024
Verified
Sales returns and allowances and sales discounts are subtracted from sales in reporting net sales in the income statement.
Sales Returns and Allowances
A reduction in sales revenue that occurs when customers return products or receive discounts for unsatisfactory goods.
Income Statement
A financial statement that shows a company's revenues, expenses, and profits over a specific period, providing insight into operational efficiency.
- Understand how to report sales, net sales, and the implications for the income statement.
Verified Answer
SZ
Stephanie ZeiglerJun 01, 2024
Final Answer :
True
Explanation :
Sales returns and allowances and sales discounts are deductions from gross sales to arrive at net sales, which is reported in the income statement.
Learning Objectives
- Understand how to report sales, net sales, and the implications for the income statement.